5 ms·

Given that 3DSecure is required for all European cards we should have been seeing lower fees since that requirement. Instead fees are going up.

Raed667 4y ago
How can a user dispute a transaction if they used 3DSecure?
- deleted 4y ago
  [deleted]
- sleepyhead 4y ago
  A dispute is not only for transactions you didn't perform, it is also for situations like not getting the purchased product or similar. So 3DSecure will significantly decrease fraud, not other disputes.
  - kramerger 4y ago
    But fraud are the problematic ones, the normal disputes are not as costly
    - sleepyhead 4y ago
      My experience is that disputes are 100% from Americans who are encouraged by banks to "just do a dispute" anytime they are dissatisfied with anything. And in 100% of these cases it is customers who forgot to cancel or just didn't need the service as much, not really any actual dissatisfaction. Most fraud is stopped by Stripe and not really a big issue, in some cases we do a manual check and it is obvious fraud (no account activity, info not matching, fake data entry etc) and we just refund the charge before any dispute is made.
      - lxgr 4y ago
        On the other hand, the existence of a consumer-leaning disputes resolution system, while pretty unfair to merchants in some situations, is probably a big accelerator for e-commerce in general. I'm much more likely to enter my card number somewhere online knowing that I'll be made whole if something doesn't work out than knowing I'll have to fight for my money back, submit evidence I might not have etc. Just like with fraud [1], and for similar reasons, the optimal number of successful "false disputes" in a payments and commerce system is probably non-zero: Hopefully, for every dishonest/egregious dispute, merchants see dozens of customers that would otherwise not dare to do business with an unknown/new merchant. [1] https://www.bitsaboutmoney.com/archive/optimal-amount-of-fraud/ https://www.bitsaboutmoney.com/archive/optimal-amount-of-fra...
        bodomalo 4y ago
        The system you talk about is called PAYPAL. Paypal is able to step in BETWEEEN - bevore the customer is able to start a stupid and complicated CHARGEBACK at his bank. Very often you loose a paypal case. But: That means only the CHARGE(money) goes back, but the bank can not take a 35$ fee for chargeback too. You understand? I am selling 99 cent downloads. On Paypal I loose nothing (99 Cent goes back) On stupid systems like stripe, where they do not handle any customer-communication - I loose 20 Euros + 99 Cent. Complete desaster. I will add a 5 Cent extra fee to stripe payments in the future to handle that high chargeback fee. That will work into paypals hands.
- bodomalo 4y ago
  They go to their bank, they say: I have not done that. And their bank wants to have their customer with them - so they steal the money from the merchant. Thats what they are allowed to do. Think about it: a) The customers bank is the ONLY judge, they can say: Merchant, you lost the dispute. b) The bank wants to do something in the favour of THEIR customer, why should be bank decide in the favour of a NON-CUSTOMER (the unknown merchant) This system is complete bogus, nonsense and just stupid. There is around 0,1% customers around who are just a...holes and try to get back some money. If they know how the system works, they do it. For example: If you loose your credit card you can go to the bank and say: All payments before date XY are not mine. There might be 1 illegal payment, but they can say: Everything since November was fraud. Bank will believe them. I have "online customers" who did that, and I did not even get their contact details to sue them.
capableweb 4y ago
Also, as far as I can understand https://stripe.com/docs/disputes/how-disputes-work https://stripe.com/docs/disputes/how-disputes-work, Stripe doesn't actually do anything manual in the process, it's all handled by the users bank or automatically by Stripe (notifications, taking fees and so on). So how it got more expensive for Stripe?
- smca 4y ago
  Stripe is charged every time a user faces a dispute. These fees have been increasing in recent years. Managing disputes is also a costly and manual process for our users. So we’ve invested heavily in ways to help mitigate disputes from occurring in the first place with Stripe Radar (incl. by default), or by using Chargeback Protection (where we cover the disputed amount and waive any fees without needing to submit any evidence).
  - capableweb 4y ago
    > Stripe is charged every time a user faces a dispute. Is this charge returned to Stripe if the bank rules in the favor of the Stripe user? Or did that change recently as well, as now Stripe won't hand back the fee in case the dispute is overturned. Thanks a lot for jumping into the thread with some more facts.
    - smca 4y ago
      That's right. Stripe is charged regardless of the dispute outcome (the networks don't refund the fee). So our focus is twofold: prevent disputes from happening in the first place and help users manage them if/when they occur.
      - codegeek 4y ago
        Yes but doesn't Stripe pass that fee on to the merchant ? If a dispute is lost, the fees are not returned back to the merchant so I assume Stripe uses that to pay the network.

Raed667 4y ago

How can a user dispute a transaction if they used 3DSecure?

deleted 4y ago
[deleted]
sleepyhead 4y ago
A dispute is not only for transactions you didn't perform, it is also for situations like not getting the purchased product or similar. So 3DSecure will significantly decrease fraud, not other disputes.
- kramerger 4y ago
  But fraud are the problematic ones, the normal disputes are not as costly
  - sleepyhead 4y ago
    My experience is that disputes are 100% from Americans who are encouraged by banks to "just do a dispute" anytime they are dissatisfied with anything. And in 100% of these cases it is customers who forgot to cancel or just didn't need the service as much, not really any actual dissatisfaction. Most fraud is stopped by Stripe and not really a big issue, in some cases we do a manual check and it is obvious fraud (no account activity, info not matching, fake data entry etc) and we just refund the charge before any dispute is made.
    - lxgr 4y ago
      On the other hand, the existence of a consumer-leaning disputes resolution system, while pretty unfair to merchants in some situations, is probably a big accelerator for e-commerce in general. I'm much more likely to enter my card number somewhere online knowing that I'll be made whole if something doesn't work out than knowing I'll have to fight for my money back, submit evidence I might not have etc. Just like with fraud [1], and for similar reasons, the optimal number of successful "false disputes" in a payments and commerce system is probably non-zero: Hopefully, for every dishonest/egregious dispute, merchants see dozens of customers that would otherwise not dare to do business with an unknown/new merchant. [1] https://www.bitsaboutmoney.com/archive/optimal-amount-of-fraud/ https://www.bitsaboutmoney.com/archive/optimal-amount-of-fra...
      - bodomalo 4y ago
        The system you talk about is called PAYPAL. Paypal is able to step in BETWEEEN - bevore the customer is able to start a stupid and complicated CHARGEBACK at his bank. Very often you loose a paypal case. But: That means only the CHARGE(money) goes back, but the bank can not take a 35$ fee for chargeback too. You understand? I am selling 99 cent downloads. On Paypal I loose nothing (99 Cent goes back) On stupid systems like stripe, where they do not handle any customer-communication - I loose 20 Euros + 99 Cent. Complete desaster. I will add a 5 Cent extra fee to stripe payments in the future to handle that high chargeback fee. That will work into paypals hands.
bodomalo 4y ago
They go to their bank, they say: I have not done that. And their bank wants to have their customer with them - so they steal the money from the merchant. Thats what they are allowed to do. Think about it: a) The customers bank is the ONLY judge, they can say: Merchant, you lost the dispute. b) The bank wants to do something in the favour of THEIR customer, why should be bank decide in the favour of a NON-CUSTOMER (the unknown merchant) This system is complete bogus, nonsense and just stupid. There is around 0,1% customers around who are just a...holes and try to get back some money. If they know how the system works, they do it. For example: If you loose your credit card you can go to the bank and say: All payments before date XY are not mine. There might be 1 illegal payment, but they can say: Everything since November was fraud. Bank will believe them. I have "online customers" who did that, and I did not even get their contact details to sue them.

capableweb 4y ago

Also, as far as I can understand https://stripe.com/docs/disputes/how-disputes-work https://stripe.com/docs/disputes/how-disputes-work, Stripe doesn't actually do anything manual in the process, it's all handled by the users bank or automatically by Stripe (notifications, taking fees and so on). So how it got more expensive for Stripe?

smca 4y ago
Stripe is charged every time a user faces a dispute. These fees have been increasing in recent years. Managing disputes is also a costly and manual process for our users. So we’ve invested heavily in ways to help mitigate disputes from occurring in the first place with Stripe Radar (incl. by default), or by using Chargeback Protection (where we cover the disputed amount and waive any fees without needing to submit any evidence).
- capableweb 4y ago
  > Stripe is charged every time a user faces a dispute. Is this charge returned to Stripe if the bank rules in the favor of the Stripe user? Or did that change recently as well, as now Stripe won't hand back the fee in case the dispute is overturned. Thanks a lot for jumping into the thread with some more facts.
  - smca 4y ago
    That's right. Stripe is charged regardless of the dispute outcome (the networks don't refund the fee). So our focus is twofold: prevent disputes from happening in the first place and help users manage them if/when they occur.
    - codegeek 4y ago
      Yes but doesn't Stripe pass that fee on to the merchant ? If a dispute is lost, the fees are not returned back to the merchant so I assume Stripe uses that to pay the network.